1. Investing 101

2. Lesson Objectives Identify a security Calculate interest/ coupon/ dividend payments Identify different types of securities Describe the need for securities Identify companies that under write securities Describe the process of underwriting

3. Securities A security is a fungible, negotiable financial instrument that represents some type of financial value. Regulated by SEC Can be debt (bond) or equity (stock) types of security

4. Types of Securities Preferred shares: higher claim on assets and earnings – Debt (dividends) and equity (share appreciation) Common shares: can have voting rights, bottom of the priority ladder, usually outperform bonds and preferred shares, but more risk – Divided into classes

5. CLasses Some, not all companies issue classes of stocks These can be terms class A, B, C, etc – These are defined by convertibility and voting rights – Classes determined by ownership Try to keep voting rights in the hands of specific people – Examples could be 10 votes per share or 1 vote per share

6. Treasury Stock Decreases amount of available stock Stock buy back Laws of economics

7. Securities Many companies issue securities – Define the term security – Identify 2 US based companies that issue securities – Identify 2 International companies that issue securities Research the types of securities that each company issues Identify the type, classification, rights, payment options, price, time duration, and any other characteristic that applies

8. Observations Why do companies issue securities? What is the purpose of different securities? How are US based and International companies similar and different based on your group’s information?